Snack business investment firm Halen Brands is gaining expertise in e-commerce to support its brands for online distribution, CEO and co-founder, Jason Cohen, said.

Cohen has helped grow snack companies like Chef’s Cut Real Jerky and Road Crew Crunch, was previously a partner at SkinnyPop Popcorn and the president of the Hain Celestial’s snacks and club division.

He said the club distribution channel was where entrepreneurs built new brands and innovation platforms about 15 years ago, however, today, most millennials are shopping online.

“For us not to be a dinosaur five years from now, we need to be [present] in e-commerce as well,” he added.

Balancing price points

Following Amazon’s acquisition of Whole Foods
, Cohen said many startups that have survived solely on e-commerce now have the opportunity to display their products in a retailer “that is going to be vertically integrated.”

“[These products] can have their online presence and same pricing structure on shelf,” he said. “It also gives consumers the ability to know what’s available online by walking the shelves at Whole Foods.”

However, the challenge for manufacturers comes from the fact that online retailers like Amazon are looking for growth, so they are willing to sell at cost or below cost, Cohen noted.

“If e-commerce is giving away product at a lower price, producers should figure out how to give brick & mortar stores the ability to sell the product at the pricing they need to keep their stores open,” he said.

Taste outweighs buzzwords

Cohen said food producers are rushing to put products onto the market based on trendy ingredients, like soy or peas.

Even though those ingredients are able to help consumers navigate online, “what the US market is missing is to make those products taste good,” he noted. “There are many brands with great functionality and great-looking packaging, but they are not hitting the taste expectations.

“Getting the right packaging and even the initial distribution based upon that functionality does not mean you will get repeat business,” Cohen said.

The snack food industry is going to see more ultra-spicy flavors as consumers want to “push the button on hotter flavor profile,” he said.

Halen Brands will continue to scale up e-commerce business and will launch it plant-based protein range called The Only What You Need later this year.

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